Cosmosteel

Cosmosteel: Proposed to issue 26.4m new shares at $0.58 apiece to Hanwa, a Japanese-listed steel trading company which also has dealings in other metals, food products, petroleum & chemicals, lumber and machinery. In addition, director and majority shareholder, Ong Chin Sum, has also agreed to sell his entire 21.3% stake (56.2m shares) to Hanwa at the same price. On completion, Hanwa will turn into Cosmosteel's largest shareholder with 28.5% stake- just shy of the 30% level requiring Hanwa to launch a mandatory offer for remaining shares, according to SGX rulings. Hanwa has given its undertaking not to sell any of its shares within a two-year period upon the completion date. Subsequently, both Cosmosteel and Hanwa will enter into a strategic alliance to cooperate to create synergies, as well as to promote sales efforts on each companies' products. The counter has not resumed trading at this point. At the placement price of $0.58/share, Cosmosteel will be valued at a proforma FYSep14 P/B of 1.4x and 30.4x P/E.